UBS cuts 2,000 jobs after Q4 loss

UBS will cut 2,000 more jobs at its investment bank and pushed ahead with a tough restructuring after it posted a 8.1 billion Swiss franc ($7 billion; Dh26 billion) net loss in the fourth quarter, missing forecasts.

The loss on Tuesday followed a hefty 8.8 billion Swiss franc trading loss in the quarter, as well as charges it made after selling billions of toxic assets to the Swiss National Bank when it was rescued by the state in October.

UBS continued to suffer massive outflows in the fourth quarter at its core wealth management business. But the Swiss bank said net new money had turned positive in both wealth management and asset management in January, the first time after a streak of negative quarters.

"UBS has had an encouraging start to the year," it said in a statement. "However, financial market conditions remain fragile as company and household cash flows continue to deteriorate... Our near-term outlook remains cautious."

UBS also announced structural changes to refocus the bank on its core Swiss businesses, its global wealth management operation – the world's biggest – and on the growth potential of its onshore business.

"We are emphasising the importance of our core business in Switzerland, which will be much better represented in our leadership and governance going forward," Chairman Peter Kurer said in a statement.

UBS said it is creating two new business divisions: Wealth Management & Swiss Bank under the leadership of Franco Morra and Juerg Zeltner, and Wealth Management Americas, led by Marten Hoekstra. All three are members of the board.

UBS also said it was continuing to cut the size of its troubled investment bank, saying it aimed to bring its total staff to about 15,000 from 17,171 now.

UBS's loss for 2008 came in at 19.7 billion Swiss francs, the highest ever by a Swiss group. A Reuters poll had forecast UBS to have a loss of 7.1 billion Swiss francs in the quarter and a loss of 18.7 billion francs in the year.

The Swiss bank giant, which made nearly $49 billion (Dh180 billion) of writedowns in the credit crisis, said it had suffered new money outflows of 58.2 billion Swiss francs at its prized wealth management unit, higher than the previous quarter and forecast.

Rich clients had withdrawn 49 billion francs in the third quarter, or around 2.5 per cent of the bank's assets under management in its core wealth management division.